October 3, 2022

Cryptocurrencies failed to break the $1.1 trillion market cap resistance, which has been holding strong for the past 54 days. The top two coins held back the market as Bitcoin (BTC) lost 2.5% and Ether (ETH) recovered 1% over the past seven days, but a handful of altcoins staged a strong rally.

The total capitalization of crypto markets fell 1% to $1.07 trillion between July 29 and August 5. The market was negative are affected from reports on August 4 that the US Securities and Exchange Commission (SEC) is investigating every US crypto exchange after the regulator accused a former Coinbase employee of insider trading.

Total Crypto Market Cap, US$ Billions. Source: TradingView

While the top two cryptocurrencies failed to post weekly gains, traders’ appetite for altcoins remained unaffected. Investors were positively affected by Coinbase’s exchange partnership with BlackRock, the world’s largest financial asset manager, responsible for $10 trillion worth of investments.

Coinbase Prime, the service offered to BlackRock clients, is an institutional trading solution that provides trading, custody, funding and staking in more than 300 digital assets. Consequently, comparing the winners and losers among the top 80 coins provides skewed results, as 10 of them have rallied 12% or more over the past seven days:

Weekly winners and losers among the top 80 coins. Source: Nomics

FLOW is up 48% after Instagram was announced support for blockchain Flow via Dapper Wallet. The social network controlled by Meta (formerly Facebook) is expanding its integration of non-tradable tokens.

Filecoin (FIL) gained 38% NEXT the v16 Skyr upgrade on August 2, which hardens the protocol to avoid vulnerabilities.

VeChain (VET) gained 16.5% after some news sources incorrectly announced a partnership with Amazon Web Services (AWS). VeChain Foundation explained that the AWS report was first reported in a May 9 case study.

Tether premium deteriorated slightly

Premium OKX Tether (USDT) is a good gauge of China-based cryptocurrency retail trader demand. It measures the difference between China-based peer-to-peer transactions and the US dollar.

Excessive buying demand tends to push the index above fair value at 100%, and during bear markets, Tether’s market supply is flooded, causing a discount of 4% or more.

Tether (USDT) peer-to-peer against USD/CNY. Source: OKX

Currently, the Tether premium is at 98.4%, its lowest level since June 10th. While far from retail panic selling, the index showed a modest deterioration last week.

However, weaker retail demand is not a concern, as it partly reflects a 69% year-to-date decline in overall cryptocurrency capitalization.

Futures markets show mixed sentiment

Perpetual contracts, also known as reverse swaps, have a built-in interest rate that is typically charged every eight hours. Exchanges use this commission to avoid currency risk imbalances.

A positive funding ratio indicates that longs (buyers) require more leverage. However, the opposite situation occurs when shorts (sellers) require additional leverage, causing the funding rate to become negative.

Accumulated interest rate on August 5 perpetual funding futures. Source: Coinglass

As depicted above, the accumulated seven-day funding rate is either slightly positive or neutral for the major cryptocurrencies with open interest. Such data suggests a balanced demand between long leverage markets (buyers) and shorts (sellers).

Given the absence of Tether demand in Asia and mixed perpetual contract premiums, there is a lack of confidence from traders as the total cryptocurrency market capitalization struggles with the $1.1 trillion resistance. So, for now, the bears seem to have the upper hand considering the uncertainties caused by the SEC’s filing of charges against a former Coinbase executive.

The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.